Agriculture Committee on Nov. 7th, 2006

[Clair Gartley]

I think we're very pleased so far with the amount of participation in the program and the amount of funds that we've been able to move out quite quickly through the program. From a program management perspective, things are going well, and we're trying to meet the service standards that we've set and process applications and get the cheques out as quickly as we can. That aspect is going well.

[The Chair, Conservative, Gerry Ritz]

Thank you, Mr. Atamanenko.

Just before we move to the five-minute round, I had one question myself. How many of these farm gate trainers are out there across the country? We've got probably $170 million that goes into the administration side--the trainers, the administration, and so on. How many folks are actually out there under contract?

[Clair Gartley]

Public Works actually manages that for us. There are about 190 consultants on a roster that we have to provide to the farm business assessment services. We can supplement that list with what we call a short-form contract, so we can add more trainers. We're also looking at other ways in which we may be able to increase the number of people available to deal with the applicants to the options program.

[The Chair, Conservative, Gerry Ritz]

How are the credentials for someone filling that post ascertained?

[Michèle Bergevin, Deputy Director, Renewal Regional Services, Canadian Agri-Renewal Services, Department of Agriculture and Agri-Food]

That's done by looking at their education, their experience in performing financial assessments, and so on. There are very set criteria.

[The Chair, Conservative, Gerry Ritz]

So they may not necessarily have any background at all in agriculture or a working knowledge of farm gate—

[Michèle Bergevin]

They also have to have a background in agriculture.

[The Chair, Conservative, Gerry Ritz]

Do you mean an education-based background or a background in the actual upbringing?

[Michèle Bergevin]

I mean both.

[The Chair, Conservative, Gerry Ritz]

I'm just wondering how you get that job; I don't qualify for the program, so as a farmer, I thought maybe I could be the consultant. That sounds like a lot better deal than the program.

Mr. Easter, go ahead for five minutes, please.

[Wayne Easter, Liberal, Malpeque, PE]

Thank you, Mr. Chair, and thank you, folks, for coming.

The simple question on the management side would be how you achieve a positive net income when, even for your most efficient producers, the return for the product is less than the cost of production. How do you do it? I'm looking for a simple answer.

[The Chair, Conservative, Gerry Ritz]

Mr. Easter, if there were a simple answer we'd be out of work.

[Wayne Easter, Liberal, Malpeque, PE]

The problem here, and my major concern with this program, is that the government failed to provide immediate cash in the spring as they had indicated they would, which could have been under an ad hoc program based on what the problem really is, which is low commodity prices. Instead, we have this program, which is clearly a blame-the-victim approach.

If you look at your brochure, Clair, it says, “Enhance skills”, “Develop a business plan”, “Improve your income prospects”. Look at the global statistics. Canada has had three low-income years, three record low-income years. The United States has had the three highest years. The problem is not management on the farm. Go to my report. These guys might love my report, and you've got it gathering dust over there in the department. When you look at every economic indicator--production per acre, production per cow, etc.--every one, except net farm income, is positive. The problem isn't this.

If you're a farmer who's farmed for 30 years--and I know a lot of them--ten years ago their net worth was $1 million. Today they're going in to you with their head down, saying that they're going to have to take a skills development program. This is all wrong. The problem is low commodity prices, not skills. That's where the problem is. So why don't we deal with the problem?

[Clair Gartley]

I think the problem we're trying to address—

[Wayne Easter, Liberal, Malpeque, PE]

I have one more question.

[Clair Gartley]

—with this program is the low family income. Regardless of what else is going on, there are those families that are having this difficulty, and we're trying to address that problem and bring every tool we can to bear. As I mentioned, we've had people who have used these other services and found that it has really helped them.

[Wayne Easter, Liberal, Malpeque, PE]

There is no question that these services are fine. The problem is that the whole thrust--and this program is symbolic of that--is as if it's a skills management program, when it's a policy program within Canada as a whole that results in low commodity prices.

Ken has to get in here on my time, but there's a problem with the $50,000, in it being one year. Why wasn't it done over an average of three years? Some people had either health problems in their herds or feed wheat problems, or whatever.

The problem with line 150 on income is that there are some cases where, in order to pay their electricity bills or their fuel bills, they actually sold inventory that they normally wouldn't have sold, which brought them up over the threshold, and now they don't qualify.

So just those couple of points alone....

Ken.

[Ken Boshcoff, Liberal, Thunder Bay—Rainy River, ON]

In northwestern Ontario and in northern Minnesota, there was a horrendous drought, a record low rainfall, and water levels are at an all-time low. If you had to pick one pilot program in the whole agriculture department, why wouldn't you go to a disaster relief program? Isn't that what the farm groups are saying? They're doing it--the Ontario Federation of Agriculture and the Canadian Federation of Agriculture.

With the low uptake that you're getting from here--and I understand that the previous minister had also recommended against going to an option program--why wouldn't you have gone to something where there's an immediate need, whether it's drought relief, flood relief, or disaster relief in some form or another? These people haven't had a response from the minister, and there has been no action from the department. Clearly there's a need for disaster relief, as opposed to something like this with low uptake. All the people in my riding have been complaining to me that they don't qualify for this, whereas I have several hundred on the drought side.

[Clair Gartley]

Certainly a number of tools are available, and the minister has committed to looking at things like disaster relief. The cover crop protection program came out this year. My colleague who's next, Danny Foster, can probably address this better than I can, but certainly those are things that the minister is definitely considering doing. There are a number of approaches we're trying to take to address the issues.

[The Chair, Conservative, Gerry Ritz]

You're out of time, Ken. I'll get back to you.

Mr. Anderson, five minutes.

[David Anderson, Conservative, Cypress Hills—Grasslands, SK]

I have just a couple of questions, and then I'll turn it over to Mr. Bezan.

One of the criticisms we've heard has been from tax planners who, in doing 2005 tax forms for farmers, had the opportunity to do a couple of different things with inventories. They had options on how that was reported. They did what they felt was right at the time, but in light of this program, they made some wrong decisions there. The farmers who did not have the income would have qualified for the programs. Because of the tax planning, they made those changes. Do you have any way of dealing with that?

My second question actually applies to the same thing. I have been told by accountants that next year the number of people who will qualify will probably go up by 50% because they're able to move the numbers around in the 2006 tax forms. I'm just wondering if you can address those two issues, and if you do, I'll turn it over to James.

[Clair Gartley]

To the first question, the goal was to get the program out. To respond to that, we would have had to delay the program a year, which really wouldn't have helped the people who needed the help this year. Certainly next year when the program is available, everybody will be much more aware of it and will manage their tax situation and be advised accordingly by their accountants.

Again, these are the kinds of issues--why we didn't look at three or four years of returns, and those kinds of things. The more you do that, the more you complicate the program and slow down the ability to get funds out. The real goal was to try to move things as quickly as possible.

As I said earlier, whatever is there at CRA when you make your application to the program, that's the information we're using to do the assessment on your application. How this changes in the future is probably something the advisory committee will look at.

[James Bezan, Conservative, Selkirk—Interlake, MB]

Thank you.

I have a couple of quick questions. In my area, a lot of the cow-calf operators who thought they would qualify under the program don't hit that $50,000 mark. They're full-time in farming, but because of BSE and depressed prices, they're just under that $50,000 mark for gross farm sales. Is there anything we can do? These are more than just depressed commodity prices; they were caught in a very serious situation with an animal health issue and border actions taken by other countries.

I'll let you comment on that first.

[Clair Gartley]

The $50,000 is an eligibility parameter. It's a policy decision we can't change. That's the parameter to use as we assess applicants coming to the program. However, there are a lot of other tools that Agriculture and Agri-Food Canada works with directly or with the provinces to try to address the issues you mentioned. A number of BSE programs, income stabilization programs, and other programs help address issues for those individuals.

[James Bezan, Conservative, Selkirk—Interlake, MB]

The second point I wanted to make was this. A lot of farms are incorporated now and a lot of farm owners draw salaries out of their farm corporations. That has made them virtually ineligible under the program, even though the farm corporation can be losing hundreds of thousands of dollars. Because they pay themselves a salary of $25,000 or slightly above, essentially they've taken themselves.... Because the wife takes a salary, the husband takes a salary, and some of the kids take salaries, there is a huge net loss there, but because of the way it's structured they're not qualifying for the program.

Is there no way to balance that through farm loss versus income?